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Senators urge DOJ to scrutinize landlords’ use of RealPage software to raise rents


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Four US senators are calling on the Justice Department to take a hard look at how Richardson’s RealPage software is used by large homeowners.

Democratic Senators Elizabeth Warren, Tina Smith, Bernie Sanders and Ed Markey sent a letter March 2 to Assistant Attorney General Jonathan Kanter about their concerns about the role of money-setting software algorithmically like RealPage’s YieldStar in pricing rental properties.

The letter comes after ProPublica announced an investigation into landlords’ use of RealPage’s software in October. In November, the Justice Department opened an investigation into whether RealPage facilitated collusion among landlords when there was a question about the 2017 merger between RealPage and its biggest price competitor, ProPublica reported.

The rise of institutional investors and rent-setting algorithms has weakened competition in an already tense housing market, leading to substandard services, the senators wrote. standards and unnecessarily high housing costs for American families.” “It is therefore essential that the department use all its tools to ensure that tenants do not fall victim to rental companies and anti-competitive forces.”

The senators opened their own investigation into YieldStar in November, asking for information on how rent-setting software has affected the rental housing market.

They said the company didn’t give them all the information they requested, but noted that RealPage’s website says its revenue management software is used for more than 4 million units and elements in it. Rental transaction data for more than 13 million units.

The senators wrote that the information provided to them by RealPage also revealed that YieldStar usage was most prevalent in some areas most targeted by buyers and with the highest rent increases.

Even the widespread use of proprietary rental data anonymized and aggregated by the country’s largest landlords could lead to those companies’ de facto valuations, the senators wrote. , which drives up prices and hurts tenants.” “Given these findings, the DOJ should act to protect American families and closely look at rent-setting algorithms like YieldStar to determine if they have an anticompetitive impact on the local housing market.” or not when seeing an increase in institutional investor activity.”

RealPage went public over a decade ago in a $135.3 million stock sale. It was acquired and privatized by private equity firm Thoma Bravo in a $10.2 billion deal in 2021.

In a statement provided to The News in response to the senators’ letter, RealPage said: “RealPage appreciates the opportunity to work with the senators’ office and overall, we are always open to collecting engage policy stakeholders to ensure a comprehensive and well-informed understanding of the benefits we contribute to the rental ecosystem.”

Deputy Attorney General Doha Mekki said at an antitrust conference in Miami in February that the Justice Department’s antitrust division was withdrawing guidance issued between 1993 and 2011 outlining permissible conduct in relation to law enforcement. regarding information sharing, Bloomberg Law reported.

“This guide has provided a safe haven for companies like RealPage and we now know—based on the results of our investigation—that that safe harbor may have offered potential opportunities. capacity for de facto collusion and price fixing,” the senators wrote in their letter.

According to Bloomberg Law, Mekki said the growing use of algorithms, data rates and companies’ ability to anonymously remove sensitive information require new scrutiny.

2023 Dallas Morning News.
Distributed by Tribune Content Agency, LLC.

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